China's economy shows signs of stabilising but property slump threatens outlook
By Ellen Zhang and Joe Cash
BEIJING (Reuters) -China's factory output and retail sales grew at a faster pace in August, but tumbling investment in the crisis-hit property sector threatens to undercut a flurry of support steps that are showing signs of stabilising parts of the wobbly economy.
Chinese policymakers face a daunting task in trying to revive growth after a brief post-COVID bounce in the wake of persistent weakness in the crucial property industry, a faltering currency and weak global demand for its manufactured goods.
Industrial output rose 4.5% in August from a year earlier, data released on Friday by the National Bureau of Statistics (NBS) showed, accelerating from the 3.7% pace in July and beating expectations for a 3.9% increase in a Reuters poll of analysts. The growth marked the quickest pace since April.
Retail sales, a gauge of consumption, also increased at a faster 4.6% pace in August aided by the summer travel season, and was the quickest growth since May. That compared with a 2.5% increase in July, and an expected 3% rise.
The upbeat data suggest that a spate of recent measures to shore up the economy are starting to bear fruit, prompting JP Morgan to raise its forecast of China's 2023 gross domestic product growth to 5% from prior 4.8%.
ANZ also upgraded its growth forecast for the world's second largest economy by 0.2 percentage points to 5.1%.
Yet, a durable recovery is far from assured, analysts say, especially as confidence remains low in the embattled property sector and continues to be a major drag on growth.
«Despite signs of stabilisation in manufacturing and related investment, the deteriorating property investment will continue to pressure economic growth,» said Gary Ng, Natixis Asia
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